Despite narrower refining margins, downstream refinery capital spending will remain robust in the next two years, with about $9.2 billion worth of active capital projects (scheduled for construction start in 2016-2018) planned for 2016 and $9.3 billion in projects in 2017, according to market research firm Industrial Info Resources (IIR). Some observations of the downstream market that will pave the way for Optimization Projects:
- Crack spread continues to influence capital spend
- Oil prices fell quicker than prices of finished products creating a tailwind.
- Downstream margins fell in the later part of 2015 as gasoline and distillate inventories built up
- Capital project will be smaller reliability, optimization addressing octane improvements, sulfur reduction, and other regulatory-driven requirements.
With this type of capital spending, the market for DCS and PLC is still relatively flat or even negative, however, the industrial software work is fairly healthy. Advanced Process Control (APC) has become easier to install and bolt-on to existing process control infrastructure using OPC, OPC-UA. Industry leaders continue to focus on ease of use and "ease of maintenance and support. The concept of "Smart-tune" is growing in adoption among Refining and Petrochemical owner operators.. Smart-tune recognizes the fact that tuning of the objective function has been difficult for casual users, leading to model degradation and eventually poor process performance. Smart-tune functionality in modern APC controllers enables casual users to perform as "APC-Gurus" and further, provide for much needed tiered support by APC Service Companies, and OEM's. There is already a shift in APC adoption underway in the oil refining and petrochemical industries to adopt APC by Technology Suppliers investing in sustainability algorithms like "Smart-tune"that ease support and maintenance and enable remote support. ARC is currently re-evaluating the APC market, growth, and adoption by industrial companies. Please stay "tuned" for more updates later on.
